Hexcel Turnaround - 2001 (A)
Posted: 25 Apr 2012
Date Written: January 4, 2012
Hexcel's new CEO is faced with deciding how to "take out" $60 million in cash costs in fiscal 2002, as two of the company's end markets - electronics and commercial aerospace - are expected to decline precipitously. Options include closing plants, exiting a business, or undertaking a major headcount reduction. Includes a description of Hexcel's private equity relationship with Goldman Sach's Capital Partners and presents the financial challenges of renegotiating bank lending covenants and managing maturing debt. Focuses on selecting a turnaround approach from the point of view of a general manager (the CEO).
Learning Objective: To illustrate the problems facing a general manager in a turnaround situation.
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